Traditional Institutional Lender Sets Up

TRANSACTION OF THE WEEK!!!

$3,850,000 For "Coast to Coast" Cross-Collateralized Acquisition Financing for Self-Storage Properties (One Mid-Development and One Pre-Development): GSP/Rifkind created a solution for a borrower needing a quick close and the ability to understand this "story" transaction. The Properties: (1) San Diego Area: 54,000 s.f. lot, well located near I-5. Presently occupied by an existing impounded auto tow facility/parking lot with minimal improvements. Income In Place: Approx. $8,000/month (month-to-month basis). Current zoning allows for development of self-storage on the site. Our borrower plans to construct a facility of to be determined square footage (between 60,000-90,000 s.f. depending on entitlements) in a submarket presently underserved by this property type; (2) Upstate New York: Existing self-storage facility consisting of 5 buildings totaling 56,000 s.f. Construction is still ongoing with 279 units completed (90% occupancy) and scheduled to total 437 units at completion. A second phase with an additional 93 units is planned on an unimproved contiguous lot (also included in the acquisition). This market is also underserved with respect to self-storage. Challenges to Financing: (1) Both properties face varying degrees of entitlement risk (although both are approved for self-storage, the final allowable building size is still subject to approval); (2) Construction Risk: Construction financing has not yet been obtained; (3) GSP/R needed to understand two unique markets 3,000 miles apart; (4) Transaction had to close in quickly. Closing was accomplished within 10 business days from receipt of L.O.I. Terms: (1) Interest only; (2) partial recourse; (3) minimal lock-out, then open to prepay. (David Rifkind, David Ellis, Gary E. Mozer)

Use GSP/Rifkind's quick-close capability to create value in your transaction. For more information, contact your GSP representative

HOT MONEY !!!

Traditional Institutional Lender Sets Up Opportunity Fund With Highly Competitive Pricing for (1) bridge loans; (2) 2nd mortgages, and (3) participating mezzanine debt. General Comments: (1) Typical closing in 30 days from start to finish, quotes within 2 days and approvals within 10 days of application; (2) internal appraisal; (3) value-added opportunities on all income producing property types (multi-family, office, industrial, retail, hotels, congregate care/nursing homes, mini-storage). 1st Mortgage Bridge Financing: Most suited for acquisitions where there is some repositioning and value added. (1) Non-recourse; (2) fixed rate @ 10.25% to 10.5%; (3) 85% to 90% of cost and 75% to 80% of value; (4) 12-24 months (will go to 36 months); (5) interest only; (6) 1-2 pts.; (7) open to prepayment at par at anytime; (8) sweet spot is $2MM-10MM (can go to $33MM); (9) no minimum DSCR, but for transactions with less than a 1.0x coverage will typically require a funded interest reserve or the posting of an acceptable letter of credit. Value Added 2nd Mortgages or Loans Secured by Ownership Interest: (1) Overall LTV to 85%; (2) interest only for 3 years (may go to 5 years); (3) 15% IRR inclusive of fees; (4) also excellent funding source to buyout partners. Land Loans: (1) Up to 60% LTV; (2) 12 months; (3) land that is substantially through the entitlement process.

Major CMBS Originator Stretches to 80% LTV/1.20 DCR on Most Property Types: These new parameters were previously reserved for multifamily but are now considered "in the box" underwriting for several stabilized property types, including: Mobile Home Parks, Anchored Retail, Shadow Anchored Retail (previously unheard of even during 1997-1998), Industrial, and Multi-Tenant Office. This first tier CMBS lender is now sizing using the 80%/1.20s criteria. With the recent drop in 10 year Treasuries and compression in Swap spreads, the implementation of these new guidelines, borrowers can expect a significant increase in loan proceeds on a wider spectrum of property types.

A Fin-Fax Welcome toScott Kramer Who Joined GSP in May!!

Scott began his career in Irvine, California with Wells Fargo/Norwest Mortgage as a residential loan officer and software trainer. He then went to work for the sales team at Systems Management Specialists, a computer outsourcing company in Santa Ana, California. Scott is currently assisting Mike Gottlieb in the GSP Orange County office.